HOUSE BILL NO. 20 "An Act relating to state aid to municipalities and certain other recipients, and for the village public safety officer program; relating to municipal dividends; relating to the public safety foundation program; and providing for an effective date." Representative Carl Moses MOVED to Rescind the Committee's action in failing to adopt Amendment 6 (Lancaster and Moses). Representative Moses WITHDREW his motion. Representative Carl Moses MOVED to ADOPT Amendment 8: state aid to unincorporated communities: Sec. 29.60.140. State aid to unincorporated communities. (a) Subject to (c) of this section, the [THE] department shall pay to each unincorporated community an entitlement each fiscal year to be used for a public purpose. The department with advice from the Department of Law shall determine whether there is in each unincorporated community an incorporated nonprofit entity or a Native village council that will agree to receive and spend the entitlement. If the community is located in a borough or a unified municipality, the department may pay the entitlement only to the entity that has been approved by the assembly, and the department must have written evidence of that approval. If there is more than one qualified entity in an unincorporated community in the unorganized borough, the department shall pay the money under the entitlement to the entity that the department finds most qualified to receive and spend the money. The department may not pay money under an entitlement to a Native village council unless the council waives immunity from suit for claims arising out of activities of the council related to the entitlement. A waiver of immunity from suit under this subsection must be on a form provided by the Department of Law. If there is no qualified incorporated nonprofit entity or Native village council in an unincorporated community that is willing to receive money under an entitlement, the entitlement for that unincorporated community may not be paid. Neither this subsection nor any action taken under it enlarges or diminishes the governmental authority or jurisdiction of a Native village council. If at least $41,472,000 is appropriated for all entitlements under as 29.60.010 - 29.60.310 for a fiscal year, the entitlement for each unincorporated community under this subsection for that year equals $40,000. Otherwise, the entitlement equals $25,000. (b) In this section "unincorporated community" means a place [IN THE UNORGANIZED BOROUGH] that is not incorporated as a city and in which 25 or more persons reside as a social unit. * Sec. 4. AS 29.60.140 is amended by adding a new subsection to read: (c) The department may pay an entitlement under (a) of this section for an unincorporated community in a borough only to a qualified entity that provides at least three of the following services within the community: (1) fire protection; (2) emergency medical; (3) water and sewer; (4) solid waste management; (5) public road or ice road maintenance; (6) public health; (7) search and rescue. Co-Chair Williams OBJECTED for the purpose of discussion. Representative Lancaster explained that the amendment would allow the funds to go to the borough or organized area outside of the small community that is organizing; otherwise it is identical to Amendment 6. KEVIN RITCHIE, ALASKA MUNICIPAL LEAGUE, JUNEAU provided information on the amendment. He noted that the Alaska Municipal League did not request the amendment but has assisted in its drafting. He explained that only unorganized communities in the unorganized borough receive capital- matching grants. If a borough were formed to incorporated surrounding small [unorganized] communities they would give up their capital matching grants. The borough would receive a small grant, but it would not be as much as they currently receive as small communities. The amendment would remove a disincentive for communities to organized. The same capital matching money would be provided to small communities whether or not they are in a borough. The amendment would be an incentive to incorporation. Currently, if there were 10 small villages that wanted to form a borough they would have to give up their capital-matching grants of $25 thousand dollars each when they became part of a borough. The borough would receive a grant but it would be much smaller than the combined amount of the separate grants. Representative Croft concluded that the amendment would compliment Amendment 2 (adopted by the committee on 3/20/02) and would encourage incorporation. Vice-Chair Bunde agreed that the amendment would provide encouragement for incorporation. He observed that he would support the amendment with the expectation that it would lead to the creation of local revenue stream that would allow communities to remain incorporated. He suggested that future legislatures would need to address the issue if it does not lead local communities toward self-sustaining revenues. Mr. Ritchie explained that each unorganized community receives between $3 - $4 thousand dollars in revenue sharing. There would be between 20 - 30 communities affected by the legislation. They would have to provide three or more of the following services: (1) fire protection; (2) emergency medical; (3) water and sewer; (4) solid waste management; (5) public road or ice road maintenance; (6) public health; (7) search and rescue. If there were 20 or 30 communities the total cost of revenue sharing would be approximately $100 thousand dollars. Mr. Ritchie observed that each of these 20 - 30 communities would receive $25 thousand dollars from the capital matching grant program. The capital-matching grant combines the municipal and unincorporated portions. The amendment would add 20 -30 communities to the unincorporated portion, which would prorate the amount down. There being NO OBJECTION, Amendment 8 was adopted. Representative Foster MOVED to report CSHB 20 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 20 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with four new fiscal impact notes: (3) CED and COR.